They are not getting a pay raise, per se, but Haverhill city councilors will soon find their salaries and expense accounts lumped together and now reported to the Internal Revenue Service as income.
While the total dollar amount won’t change, counting what had previously been called expense accounts as salary may give eligible councilors a boost at retirement time. The change comes after City Solicitor William D. Cox Jr. and Finance Director Charles Benevento found city policy ran contrary to IRS rules.
Under a proposed ordinance, which the council is expected to place on file Tuesday for a required two weeks, members will receive a salary of $12,884 annually, while the president will receive an additional $1,500. They will no longer automatically receive a separate reimbursement check for expenses unless councilors approve so on a case-by-case basis.
For more than 30 years, councilors received a salary of $8,000 per year, plus an expense reimbursement for which they did not have to file any receipts and optional health insurance. The base amount is recorded by the city’s Retirement Board. Those councilors who end up with more than 10 years of city service and allow money to accrue until legal retirement age may collect a city pension.
Council Salaries a Sore Spot for Three Decades
City councilors approved raising their salaries from $5,000 to $8,000 during the spring of 1986, when they also approved the no-receipt expense reimbursement formula of $2,000 annually each and a $10,000 raise for then-Mayor William H. Ryan. Expense amounts have crept up since while salaries remained flat. In 1986, then-Councilor Gene P. Grillo led an effort to not only repeal the salary increase, but eliminate council pay and reduce expense accounts by $200 each. The repeal failed with only three of eight city councilors present voting for it. Grillo argued paid elected officials have “an unfair advantage” over opponents because city salaries potentially finance campaign costs.
A separate motion by then-City Councilor George Dekeon to roll back the raise was also defeated by the same margin.
“Six city councilors have lost touch with the people,” resident Michael Lyons said at the time. He presented a petition from 655 residents against the raises.
School Committee Raises Questionable
When the council votes on its salary, it will also approve an $8,250 annual salary for each school committee member. In a letter to councilors, Cox explained, state law specifically requires the city council to approve of school committee salaries. For the last few years, the School Committee set its own salaries during the school budget-setting process. Councilors, however, do approve the total city budget.